Plant Impact Share Discussion Threads

[wan] 15/7/2017 09:06

Buywell...Conversely, have you ever said anything positive?

You are clearly short PI and I am clearly long. You were/are also possibly short soybeans, which is your choice. I don't have a problem with negative commentary, as long as it puts across a genuine or well researched aspect.

In other words, if you and MThead provide the negative aspects, we have a degree of balance!

[buywell3] 15/7/2017 08:47

wan

Have you ever said anything -ve about this share ?

11th Jul 2017

Brazil's soy output and exports set to fall after current year records
Brazil's 2017-18 soybean production and potential exports have both been marked down in a USDA attaché report, ahead of tomorrow's all-important Wasde figures.

The report estimates production for the 2017-18 marketing year, starting in February 2018, at 105m tonnes or 8% lower than the 114m tonnes harvested in the current 2016/17 marketing year.

The large 2016-17 crop resulted from "near perfect" growing and harvesting conditions, and has already seen a sharp increase in exports.

The attaché expects a record full year export total of 64m tonnes, marginally lower than the official USDA figure of 64.1m tonnes, which may change in the WASDE.

Indeed, Brazil's soybean exports for the first four months of the current marketing year are already 11.5% ahead of the previous one.

"The low incidence of pests along the crop cycle, good rainfall distribution in most of the country and increased investment in technology, contributed to record yields by a large margin," noted the attaché.

The average 2016-17 crop yield is put at 3.34 tonnes a hectare.

Brazil's soybean plantings slow

However, using a trend yield to estimate 2017-18 soybean production reduces the figure, despite a 1.2% increase in the crop's planted area to 34.4m hectares.

While this is a record soybean area for Brazil, it also marks a slowing in the rate of area growth - it is the smallest area increase in the last five years.

The local attaché estimate is also below the official USDA figure of 34.7m hectares.

The US analyst says farmers have slowed their growth in soybean plantings due to lower crop prices, the ongoing political uncertainty in Brazil and its related currency volatility.

Prices have been falling since the start of the year – the 9% year-on year drop in January had widened to a 30% reduction by June when the crop was worth R$63.59 per 60 kilogramme bag.

The uncertainty means more farmers are holding on to their harvested soybean crop, as devaluation increases the domestic value of their product (priced in US dollars) against the export value.

The attaché estimates that 60% of the 2016-17 crop has been contracted, about 15% less than at the same stage a year ago.

But with more soybeans in crop stores, there could be pressure on space to store the corn harvest.

2017/18 exports down 3%?

Looking ahead to next season, the local attaché estimates 2017-18 soybean exports of 62.0m tonnes, down 3% year-on-year and lower than the official USDA figure of 63.5m tonnes.

This is in line with a smaller harvest and higher domestic processing volumes as higher biodiesel blending mandates come into force.

China is expected to remain the largest export customer.

[wan] 15/7/2017 08:30

Biggles...It looks to me like there was a rollover of possible a short position at 11:45....followed by some more selling, which we have to assume is speculative as opposed to in-the-know.

Bayer report in under two weeks, so we may get more information either then and/or post their Q2 Report.

[wan] 15/7/2017 08:17

Mthead...I completely disagree, but I would be interested in what you think the underlying reason is, given that PI (and Bayer) have stated "challenging industry-wide trading conditions in the country have meant that end of season inventory levels of agricultural chemical products in Brazil, including Veritas®, are higher than expected."

Iowa thought it was a big deal -

Iowa farmers receive major boost after soybean deal

The deal includes purchasing nearly all of Iowa's soybean production of 12.53 million metric tons, which is “a big deal that they would, in one day, sign 10 percent of total U.S. crop purchases.”

“It provides a great base for U.S. demand for soybeans,” Sutter said. “It’s a huge market and huge opportunities for farmers of Iowa.”
hxxp://www.kcci.com/article/dollar5b-deal-brings-460-million-bushels-of-us-soybeans-to-china/10303010


It was obvious to me that at least a big part of the issue is due to Brazil's soybean farmers holding back sales of soybeans in the hope of getting a better price. And this was then indeed confirmed to be the case -

"The Brazilian National Association of Fertilizer and Agricultural Input Distributors (Andav) recently held a meeting of seed, fertilizer, and chemical distributors and their members indicated that input sales have been slow due mainly to slow selling of the soybean and corn crops."

From my post 1108 -

I mentioned previously that it might be worth monitoring how last seasons soybean sales progress in Brazil, because farmers had been holding back sales in expectations of higher prices. This has indeed contributed to the current challenging environment, and therefore it may improve if soybean sales increase -

June 26, 2017

Brazilian Farmers Slow to Purchase their 2017/18 Inputs

Distributors indicate that there is plenty of product available for purchase and that eventually Brazilian farmers will increase their purchases by 10% compared to last year, which has been the average increase over the last three years. Andav estimates that 60% of the needed inputs for the 2017/18 crop has been purchased compared to last year at this time when approximately 80% had been purchased. They are concerned that the delay in purchasing could lead to bottlenecks in getting the products delivered in time for the start of planting in mid-September.

Full story - hxxp://www.soybeansandcorn.com/news/Jun26_17-Brazilian-Farmers-Slow-to-Purchase-their-20178-Inputs
(END)

So, whilst I don't want to get too fixated on the price of soybeans, currently it would appear to be a particularly important element in terms of the cause of Bayer's profits warning. Thus I suggested that the improved prices for soybeans should feed through to increased selling by Brazilian farmers as they had been delaying sales in the hope of achieving higher prices, which may improve the situation in terms of the subsequently delayed input purchases.

In short, Brazilian farmers are not going to leave the soybeans in storage indefinitely (as the nutritional content will fall, plus they have run out of dry storage space and subsequently corn is now piling up in the open air), and they are likely to sell well "ahead" of the US harvest. And one thing is for certain, they will not stop planting soybeans and thus nor will they stop buying inputs!

[cerrito] 14/7/2017 22:36

More shares traded today than in the last 12 trading days of June but still just 0.7% of the total shares issued

[bigglesbingham] 14/7/2017 15:13

Huge seller out there 150000 sub 30

[bigglesbingham] 14/7/2017 14:43

Well obvious that one seller has caught wind of something

[bigglesbingham] 14/7/2017 14:39

If a bad rns shoes this board stock is corrupt.

[bigglesbingham] 14/7/2017 14:02

Brubaker needs to get Isi rice rns 's quick!!!

[wan] 13/7/2017 07:52

It will be very interesting to see if the Chinese delegation signs an agreement today that could include a record purchase of US soybeans. The following article provides for an interesting read -

Soybeans disappearing from Iowa bins

Farmers are selling stored soybeans to make way for another record crop in the making.
Jul 13, 2017

Kimberley, director of marketing for the Iowa Soybean Association, says increasing strong demand is essential for soybean prices to significantly rebound from their current depression. July futures have dropped about $1.50 per bushel since March 1 and $3 per bushel from a year ago.

Two upcoming events involving the world’s largest soybean importer, China, will, hopefully, jumpstart a turnaround, Kimberley says.

Multiple Chinese soybean buyers and processors plan to sign purchase contracts for a large quantity of U.S. beans, and potentially other commodities, during a ceremony in Des Moines on July 13. The U.S. Soybean Export Council and ISA are coordinating the event. Past purchases during similar signing ceremonies have approached 500 million bushels.

Iowa trade mission to China departs July 19
Also this month, several ISA leaders will accompany Iowa Gov. Kim Reynolds, along with more than 20 other state agriculture officials, for a historic trade mission to China on July 19-28.

Full story - hxxp://www.wallacesfarmer.com/soybean/soybeans-disappearing-iowa-bins

[wan] 11/7/2017 07:57

Soybean prices have pushed higher and I note that (as anticipated) soy sales gained momentum in Brazil's top producing state of Mato Grosso and farmers have also increased forward sales of 2017/18 soybean crop -

[wan] 08/7/2017 09:05

Amarjit S Basra
AgChem/BioTech R&D Leader

Advancing understanding of periods of heat and drought sensitivity in wheat
Published on July 7, 2017

This is exciting work which is very relevant for Plant Impact’s ongoing focus on drought and high temperature tolerance in wheat. We are focusing on “precision chemical intervention” using crop enhancement molecules that produce an adequate plant stress response when the developmental stages are defined precisely, for example, in a time window from just before flowering to after flowering. Endeavors around quantifying periods of sensitivity will help our ‘new’ industry to target interventions for maximum yield impact. Impressive work.

hxxps://www.linkedin.com/pulse/advancing-understanding-periods-heat-drought-wheat-amarjit-s-basra?published=t

[bigglesbingham] 07/7/2017 09:46

More like it!

[wan] 07/7/2017 08:39

Not that I want us to get fixated on the price of soybeans, but soybean prices have continued higher. The main reason for highlighting this is that it should feed through to increased selling by Brazilian farmers as they had been delaying sales in the hope of achieving higher prices, which appears to be happening. As mentioned previously, this may improve the situation in terms of the subsequently delayed input purchases such as FOX and Veritas. Time will tell!

I note that Veritas is featured on Bayer's website home page in Brazil (along with FOX)-

Veritas
We arrived to inaugurate a new era with Veritas, a product with systemic action, working in soybean and bean crops. Its unprecedented technology promotes the intracellular transport of calcium, guaranteeing greater fixation of the flowers in the flowering stage. That is, productivity beyond the desired maximum per hectare.
hxxps://www.agro.bayer.com.br/

[bigglesbingham] 05/7/2017 14:18

I've added a bit too. They need to get more positive rns s out, be it good trial results etc. A share price on aim needs momentum, this is lost on current management. For their faults previous management were good at rns s.

[wan] 05/7/2017 12:47

Coincidentally, I added today (plus a few other purchases recently).

[bigglesbingham] 05/7/2017 12:35

Some nice buying, on dip or possible news?

[wan] 04/7/2017 14:45

It will be interesting to see what effect existing users of Veritas in Brazil, convert to using it across 100% of their soybean acreage (which might fit in with the referred to "high volume product strategy and integrated commercial offers to growers").

This guy is reporting results of an extra 7.4 bags per hectare using Veritas and will convert to using Veritas on all his soybean acres this coming season -



It will also be interesting to see if Brazilian farmers take advantage of the recent surge in the price of soybeans, which I refer to in post 1108 -

UK, 3rd Jul 2017,
by Mike Verdin

Hedge funds wrong-footed, again, by downbeat grain bets

'Sold too many soybeans'

In soybeans, managed money extended its net short position in Chicago futures and options to more than 118,000 contracts in the latest week – the highest figure on records going back to 2006.

However, the latest short bets have been left well out of the money by a rise in prices spurred by worries over hot Midwest weather, provoking concerns for US yields, and by US Department of Agriculture data on Friday showing domestic sowings of the crop this year at a level well below market expectations.

US soybean inventories as of June 1 also fell below forecasts, spurring ideas of stronger-than-expected consumption.

Full story - hxxp://www.agrimoney.com/news/hedge-funds-wrong-footed-again-by-downbeat-grain-bets--10847.html

[visionon] 01/7/2017 11:06

Thanks Wan. PIM share price has fallen 40% from mid 50s. This illustrates the need to continue to diversify by region and product. It would be helpful if PIM could comment more on that aspect when they issue their results in H2. It will be interesting to see if the new USA sales channels method works any better in this respect.

[wan] 01/7/2017 06:55

Another corporate announcement which particularly merits highlighting -

Bayer expects negative earnings impact from its Brazilian Crop Science business

Leverkusen, June 30, 2017 -

Despite an encouraging start to the year and continued good growth momentum, Bayer's Crop Science Division will have to adjust its business forecast for fiscal 2017. At the end of the harvest season in Brazil, regular stocktaking revealed an unexpectedly high channel inventory level of crop protection products. For this reason, Bayer will be working with its customers to initiate measures aimed at normalizing the situation. This will have a one-time effect of EUR 300 million to EUR 400 million on earnings (EBITDA before special items) for the full year 2017. Appropriate accounting measures are already being taken in the second quarter.

Full release - hxxp://www.investor.bayer.de/en/nc/news/investor-news/investor-news/bayer-expects-negative-earnings-impact-from-its-brazilian-crop-science-business/

This confirms it is indeed about more than Veritas and that Bayer is going to initiate action. It also, more or less, confirms that the Trading Update was a profits warning and hence why the shares dropped by as much as they have.

Bayer will obviously work hard to, at the very least, maintain their market share and given the announced adjustment, it looks like they now know what they need to do in order to achieve it! From PI's perspective we already know that Bayer's actions will mean exploring contractual amendments which would enable higher volume product strategies and integrated commercial offers to growers.

How long will exploring contractual amendments take? Well, Bayer now know what the order of magnitude is, so one assumes they are moving quickly in order implement a strategy in a timely manner and ahead of the 17/18 Brazil soybean season. Ultimately what we need is less uncertainty, so now that Bayer have announced, we may get some clarification in the not too distant future.

I mentioned previously that it might be worth monitoring how last seasons soybean sales progress in Brazil, because farmers had been holding back sales in expectations of higher prices. This has indeed contributed to the current challenging environment, and therefore it may improve if soybean sales increase -

June 26, 2017

Brazilian Farmers Slow to Purchase their 2017/18 Inputs

Distributors indicate that there is plenty of product available for purchase and that eventually Brazilian farmers will increase their purchases by 10% compared to last year, which has been the average increase over the last three years. Andav estimates that 60% of the needed inputs for the 2017/18 crop has been purchased compared to last year at this time when approximately 80% had been purchased. They are concerned that the delay in purchasing could lead to bottlenecks in getting the products delivered in time for the start of planting in mid-September.

Full story - hxxp://www.soybeansandcorn.com/news/Jun26_17-Brazilian-Farmers-Slow-to-Purchase-their-20178-Inputs

[wan] 28/6/2017 08:36

Two large corporate announcements which merit highlighting -

The first to complete one of the big mergers, where yield enhancement is one of the key drivers for the next phase of growth -

Syngenta Looks to the Future

June 27, 2017 07:30 AM Eastern Daylight Time
BASEL, Switzerland--(BUSINESS WIRE)--Syngenta today announced its new ambition and priorities following the completion of the transaction with ChemChina. The company aims to profitably grow market share through organic growth and collaborations, and is considering targeted acquisitions with a focus on seeds. The goal is to strengthen Syngenta’s leadership position in crop protection and to become an ambitious number three in seeds. Key drivers for the next phase of growth will be further expansion in emerging markets, notably China, the stepping up of digital agriculture offers, and ongoing investment in new technologies to increase crop yields while reducing CO2 emissions and preserving water resources.

Full release - hxxp://www.businesswire.com/news/home/20170627005708/en/

Brazil and soybeans is a very important market for Bayer. Bayer's commitment to the Brazilian market is further demonstrated in the release below. And although registration to launch will take 5 years plus, they are developing new fungicides 'mixtures', which will include Bayer's established products and also Sumitomo's new novel compound, which is Sumitomo's first strobilurin based fungicide (Veritas/Fortalis appears to particularly improve the performance of strobilurin based fungicides) -

Tuesday - June 27, 2017
Soybeans are a crop with great strategic importance for the country:

Bayer and Sumitomo Chemical agree to collaborate on new fungicidal mixtures in Brazil

These products will utilize Sumitomo Chemical’s novel fungicide in combination with established Bayer fungicides to create a potent new means of combating major plant diseases. Financial terms were not disclosed.

“With this strategic partnership we contribute to the sustainable development of farming in Brazil”, said Liam Condon, Member of the Board of Management of Bayer AG and president of the Crop Science division. “Growers have consistently told us that bacterial, viral and fungal diseases as well as devastating nematodes are the biggest problem they face. As the world’s largest supplier of fungicides, we offer a wide range of tailored solutions that help Brazilian growers produce more sustainably.”

Full release - hxxp://www.presse.bayer.de/BayNews/Baynews.nsf/id/Bayer-and-Sumitomo-Chemical-agree-to-collaborate-on-new-fungicidal-mixtures-in-Brazil

[wan] 23/6/2017 06:15

Comments regarding the exposure to Brazil are backward looking. In other words, since the period where Veritas shipments accounted for 75% of revenue, there has been geographic expansion into other markets, including into the largest soybean market, the USA. This should at least help offset any reduction experienced in the Brazilian market. And I again highlight that the Trading Update also indicated material growth in revenues from geographic expansion.

[mthead1968] 22/6/2017 10:23

Exposure to Brazil and soybeans is undeniable. But we are not in the business of selling soybeans. We have a product that improves yield - this will still be required regardless of the market price for soybeans.
The fact remains that the soybean crop will continue to be planted, and it is most likely to be planted over ever more hectares into the foreseeable future. As long as Bayer can sell their Fox fungicide alongside Veritas then all should be OK for PIM.
The announcement alluded to Veritas sales being less than forecast, with the possibility (how remote, no-one knows) of increased sales dependent on a renegotiation of the existing agreement. The fact that they have made this statement suggests to me that sales in Q3 could be all but non-existent.